Better buy now if you want any special dividends

Nothing like the news of a company giving out a special dividend to make investors think twice. Although the one-time declaration doesn’t come with any promise of an increase in a stock’s per share price, it sure can unexpectedly line an investor’s pockets. And what better time —or year—to do so than now when the tax on dividends is still low but expected to increase in 2013.

Yes, there truly is a reason to jump up and down if you’re the owner of any of the many companies declaring a special dividend. No matter how many shares you own, the payout is indeed special particularly since companies don’t have to ever pay a dividend in the first place.

That said, there are over 400 companies in the S&P500 list that pay divvies to their shareholders. That’s the highest number of companies doing so since 1999. While I don’t have an accurate count of how many companies are paying special dividends this year, it’s certainly dozens or more.

One company doing so is Costco. I love this store. Even met a guy I went out with while sharing a table in the snack bar area one afternoon. Clearly this big box store offers more than cheap weenies..

Anyway, own 5000 shares of Costco, for example, and their $7 per share special dividend will add an extra 35,000 bucks to your coffer. How’s that for a holiday bonus. Better yet, you can still cash in on this deal.

Costco (COST) shares closed at $103.82 on Friday, November 30, 2012, according to Google Finance. The special dividend will be paid on December 18 to shareholders of record as of December 10th. To be a shareholder of record you must own the stock by that date. That means if you’d like to enjoy Costco’s special dividend buy the shares before the 10th which means you’ve got to do so this week.

But Costco (COST) isn’t the only company paying a special dividend this year. Movado (MOV), Dillards (DDS), AOL (AOL), Franklin Resources (BEN), and Las Vegas Sands (LSV) are a few of the Russell 3000 stocks doing so before Dec. 31, according to Seekingafpha.com.

One big fact special dividend it’s too late to catch was the $38.30 per share one given to Gyrodyne (GYRO) shareholders. It’s a REIT and there is more to this story than meets the eye. Nonetheless, one had to be an owner of record of GYRO by December 1st to catch it.

I asked Robert Harvey, owner of Harvey Capital Management in Palm Beach, for a reason why a company would give a special dividend. Pointing out that dividends are after tax payments as far as a company is concerned, he said, “In some cases I suspect that they are trying to help out their shareholders tax wise,”